How Do Free-To-Play Games Make Money?

There are an increasing number of free-to-play games available, but how do their publishers earn revenue? The free-to-play game model first appeared in the late 1990s and has proven to be a great success. There is now a huge variety of these games to choose from, spanning many genres and target audiences.

Notable examples include Fortnite, League of Legends, and PUBG: As one would expect, free-to-play games do generate revenue for their publishers. In this article, we will cover the various methods by which free-to-play games are monetized.

Advertisements

Ads are the predominant source of income for free-to-play game publishers. Companies wishing to advertise their products have found that mobile games are a great place for their ads, as statistics show people are significantly more likely to click on ads in a game app than on a website. There are multiple types of ads that appear in games, and they are listed below:

• Interstitial ads. These ads cover the entire app interface and appear during transitional periods in the game, such as between levels.
• Incentivized ads. These could be called optional ads. They are often videos that the player can choose to watch to receive a reward in the game.
• Banner ads. Unlike the previous types, these do not cover the entire app interface and therefore do not obstruct gameplay.
• Contextual ads. These are quite different from the others in that they do not contain a link to a product. Instead, contextual ads take the form of brand products that appear within the game environment itself, such as Nike’s Air Force 1 sneakers appearing in the popular game Fortnite.

Microtransactions

This is a monetization model that allows players to download and play a game for free, but it either offers features that can only be obtained by paying, or provides resources that are limited unless money is spent to replenish them. Purchases are made in the game app itself, and they usually provide minor bonuses to players for a low fee.

Skins (i.e., visual customizations of characters in the game) are a common example of features that can be bought in free-to-play games. Skins are favored by gamers over other purchasable game elements (e.g., weapons and special abilities) because they do not confer an advantage on their owners.

Monetizing Data 

Advancements in computing power and the rising number of data sources (thanks to the internet) have led to the emergence of data science. This new discipline allows experts in the field to analyze large amounts of data and extract valuable insights, which can then be used to guide decisions, such as developing business strategies.

Online games allow developers to monitor player behavior, thereby gaining insight into their preferences. This data can then be used to perfect the design of later games targeted at a specific audience. Publishers of free-to-play games can either use this data themselves or sell it to other companies.

Removing Ads

As previously mentioned, ads play a significant role in the earnings of companies that publish free-to-play games. Integrating ads into games has a flip side, however, as they can be annoying and deter many players.

A solution to this problem is to give players a choice. Many games that contain ads also allow players to remove them by paying a fee. This way, everyone can get what they want from the game, whether it's a free experience or ad-free play.

Subscriptions

In the subscription-based monetization model, users pay a recurring fee at set time intervals to keep access to a service. This is more common in other types of services, most notably streaming services, such as Spotify and Netflix; however, it is becoming increasingly prevalent in games as well.

As with games that use microtransactions, games that use a subscription model are often free but lock features behind a subscription.

There are a couple of ways in which companies implement subscriptions:

• Season pass/Battle pass. When a player purchases a season pass, they can earn rewards by completing challenges during a specified period, called a season.
• Ad removal. Paying to remove ads has already been mentioned. While some games allow this with a single payment, others require a subscription.
• VIP Membership. Unlike the season pass, the VIP Membership grants benefits directly, without requiring the player to earn them.
• Publisher-level game pass. This type of subscription grants players access to exclusive content across all free-to-play games from a single publisher.